18 Jul 2017 10:14

SEB reporting on the carbon footprint of equity funds

At the end of May SEB began reporting how much carbon dioxide the Bank’s equity funds emit in relation to their benchmark indices. “We want to deliver more than just a number, so we have chosen to show customers what the funds’ CO2 values represent in comparison to car and air travel, for example,” says Hans Ek, Head of Sustainability in Investment Management.

To make it easier for fund investors to see the carbon footprint of the various funds, the Swedish Investment Fund Association has been recommending since last year that all of its member companies report their funds’ carbon footprints.

In May 2017 SEB began using a new format for reporting the carbon footprint of its equity funds.

“We begin with yearly reports for our equity funds, since it is easier to calculate the carbon footprint for these funds, as they are based on the constituent companies’ emissions,” says Hans Ek. “If we can get information on carbon emissions for at least 75 per cent of a fund’s holdings, it will be shown in the report.”

In addition to an emissions number, SEB’s reports will show emissions by companies in the funds in relation to, among other things, a typical Swedish household’s average monthly energy use and a round-trip flight from Stockholm to London.

“We have also included the funds’ indices in the reports to more clearly show what we are comparing with,” says Hans Ek. “The tool that we have purchased to produce the reports can also be used to see how the value in a particular fund changes depending on which companies the fund invests in.”

Thus far reports are only available for SEB’s equity funds, however, cooperation is under way with the Swiss consulting firm South Pole Group to produce similar reports for fixed-income funds.

A more detailed report is also available as an aid for more sophisticated customers.